In bringing Office to iOS, Microsoft is playing a dangerous game

But Apple's intransigence could be Microsoft's salvation.

It's still not official, but the evidence that Microsoft is bringing Office to the iPad and iPhone is growing in abundance. At this point, it seems to be an inevitability that Redmond will release Office apps for iOS in some form in early 2013, with Android apps following soon after.

In so doing, the company stands a good chance of cementing the role of the iPad as a business tool, eroding the advantages of Windows Phone 8 and undermining the entire value proposition of Windows RT. It will also hole Microsoft's argument that the iPad is "just" for content consumption below the waterline. The upside of Office on iOS? That's harder to fathom.

According to the Verge, Office for iOS will ship as a set of free apps (Word, PowerPoint, and Excel—OneNote is already available for iOS) that will allow viewing of their respective document types. Limited creation and editing will be enabled through purchase of an Office 365 subscription.

Should this come to pass, Microsoft will not just be banging a nail into the coffin of Windows RT and, by extension, its Surface tablet. It'll be digging the grave, tossing in the body, and then unloading a few tons of concrete into the hole to ensure that there's no risk of reanimation.

Making the unique... less unique

Windows RT's unique selling point is that it comes with Word, PowerPoint, Excel, and OneNote. It offers (almost) full fidelity reproduction and editing of Office documents. To achieve this, Microsoft has been forced to make enormous compromises: the Office apps in Windows RT offer only minimal concessions to touch-based usability. They remain apps that are essentially keyboard and mouse-centric, and accordingly, Microsoft has made its keyboard and touchpad accessory for Surface a core part of the product's branding and marketing.

On Windows Phone, likewise, the integrated Office support is one of the features that Microsoft touts as a key advantage over the competition. Windows Phone's Office support is a lot more rudimentary than that of Windows RT, enabling partial viewing and on-the-go editing of Office documents, but the application is reasonably attuned to the limitations imposed by the smartphone form factor.

There's a large class of users that don't care about Office at all. There are a number of users who care about Office so much that the version in Windows RT, or any potential version for iOS, will never be good enough. But there are also a bunch of users somewhere in between; people writing essays for their homework in Word, people balancing their checkbooks or running their home business in Excel, office workers making the finishing touches to a presentation in PowerPoint—for whom Office for iPad (or Office for Windows RT) might be more than enough—and who might well decide to forego a PC purchase entirely if their tablet can do the job.

In creating Office for iOS, Microsoft is one-upping its own platforms. On the iPad, Microsoft can't rely on the presence of keyboard accessories as crutches to make up for user interface inadequacies. As such, we can be confident that Office on iPad will be "touch native" in a way that Office 2013 isn't. While users of Windows will be forced to use mouse-oriented software even if they merely want to read documents, iPad users will be able to revel in the luxury of an application that's built for, and designed around, touch navigation.

It's highly unlikely that Office on iPad will offer full-featured editing to Office 365-enabled users, but conversely, it's all but guaranteed that the editing capabilities that it does support will be entirely comfortable for touch users.

Windows Phone's situation is not quite the same. That operating system already has proper touch versions of Office, so Microsoft will not be enabling competing platforms in quite the same way as it is in the tablet space. Nonetheless, Windows Phone's Office support is a unique selling point—one that will be eliminated if Microsoft offers Office for iOS and Android.

Granted, in both of these cases the Microsoft products will retain an edge. Windows RT and Surface will still have the near-full Office if you want it, and neither Windows RT nor Windows Phone require an Office 365 subscription to enable any functionality. If you need everything that Office can do, Windows is your only option. But if you just need a bit of what Office can do, you'll be able to look elsewhere.

Providing Office on iOS and Android does more than just diminish Microsoft's own competitive advantage; it also negates some of Microsoft's marketing tactics against those platforms, by bolstering the credibility of iOS and Android as productive business tools.

The positioning of the iPad as a pure consumption device has never entirely rung true—there are various apps that allow document creation and editing, among other things, on the platform. Nonetheless, when talking about the decisions that went into the design of the Surface tablet, former President of Windows and Windows Live Steven Sinofsky nonetheless positioned the iPad as a device designed predominantly for consumption of media; Surface, in contrast, with Office and its keyboard covers, was a much more rounded device that had first class support for traditional productivity applications.

We see this reflected in much of the marketing material around Surface. The first thing mentioned in this 90 second Surface promo video? Surface is for "your way of working." You can "do more" with Surface, and that means you can use it to "create" and use it for business.

That whole marketing angle evaporates if you can say exactly the same thing of an iPad. It means that you no longer need a PC for work; your creation and business can be performed on the iPad.

Office for Mac isn't the same

Microsoft producing Office for a competing platform is not unprecedented. Office has an OS X version, after all. One might argue that Office for OS X is harmless, and that Office for iOS will equally be harmless. But there are important differences between the two.

Windows is dissimilar from OS X in some ways that are extremely important to the enterprise. Windows, with Active Directory domains, Group Policies, and the System Center suite, is extremely easy to centrally manage and control. Microsoft makes sure to support old Windows versions with security fixes available for a decade or more after the original release. Windows networking remains reliable even when using different versions of the operating system. To a significant degree, the business world depends on these capabilities.

OS X is much weaker in this regard. Yes, it can authenticate against an Active Directory domain, but it doesn't integrate neatly with Windows-based management tools. It can access Windows fileshares, as long as you're willing to overlook things not quite working correctly all the time. Apple will offer security updates for the previous version of the operating system, but you're out of luck if you want any assistance for a ten-year-old OS X version. Even a five-year-old one is on shaky ground.

Microsoft can afford to support Office on OS X—and by all accounts make a healthy profit from doing so—because Apple is steadfastly unwilling to make OS X a suitable platform for use on the corporate desktop. Windows doesn't need Office as its unique selling point in the fight against OS X. As long as Apple's happy for OS X to be little more than a consumer play, Office on OS X doesn't threaten Windows.

The world of mobile devices is a very different place. Not only is Windows not a major player in this space, it's also not best of breed in this space. Sure, an iPad can't join a Windows domain. But nor can a Windows RT tablet such as Surface. The most common system used to secure and manage tablets and smartphones is Microsoft's ActiveSync, but this is not only supported by iOS, it's actually better-supported under iOS than it is Windows Phone: iOS provides richer, finer-grained support for ActiveSync policies than Microsoft's own platform.

Apple may be happy to carve out a small niche on the desktop, but it's not doing so in the mobile space, and that difference justifies a different approach. Against the mobile competition, Windows needs every advantage Microsoft can give it.

Why do it?

The dangers of producing Office for iOS and Android are significant. The Windows PC stands a good chance of being marginalized: even its role on the corporate desktop could decline as the iPad grows in capabilities. Office remains an important product, especially for business users, and at the moment, it's a big plus that Windows offers and other platforms can't match. Offering Office on iOS can only hurt Windows.

That might still be worth doing if it helped Microsoft's other big cash cow; Office itself. Microsoft would certainly sell a few Office 365 subscriptions off the back of Office for iOS, though it's hard to gauge just how many it would sell.

It is the case that Office has some competition on these mobile platforms. In the absence of Office for iOS, a number of competing products have materialized. Apple's iWork apps are the best known, but there are others, such as Bytesquare and (Google-owned) Quickoffice. All offer some degree of Office compatibility, all are out-and-out touch applications, all cost a handful of dollars. iWork, at $9.99 per app, is the most expensive.

None of these apps offer full fidelity support for Office documents, and none of them can do everything that Office can do, but for many users they may well be good enough. So there are certainly threats to Office. But it's hard to believe that any of these threats are as big as the threat to Windows and the PC. Office is still the gold standard for office productivity. Shipping Office for iOS to boost Office, at the expense of Windows and Windows Phone, is backwards.

Will Apple save Microsoft from itself?

In spite of these risks, the rumors and leaks are hard to ignore. It seems that Microsoft really does want to produce an Office for iOS. If Apple has its way, however, there's a chance Microsoft might never ship it.

Per AllThingsD, Apple has just rejected Microsoft's latest update to its SkyDrive app for iOS. Why? Because the updated SkyDrive app sells subscriptions to buy more storage, and Microsoft doesn't give Apple a 30 percent cut of those sales or use Apple's purchasing infrastructure. That's against the rules of Apple's App Store, and AllThingsD reports that Apple's refusing to back down and give Microsoft a concession.

According to sources speaking to AllThingsD, Microsoft's concern isn't SkyDrive per se, but Office 365. The Office apps, like the SkyDrive update, will offer the ability to purchase an Office 365 subscription, and it's this revenue that Microsoft doesn't want to give up.

Apple takes a hard line against apps offering alternative routes to in-app purchases. Apps using the Dropbox SDK were once rejected after Dropbox inadvertently left a link on its pages that allowed the purchase of more storage. A similar approach would leave Microsoft with no ability at all to offer Office 365 upsells from within its Office for iOS apps.

Take away the ability to flog Office 365 subscriptions from the apps, you take away much of the point of Office for iOS. Microsoft could change its strategy and make Office a straightforward paid app, but this runs contrary to the company's broader goal, which is converting all Office users to subscribers. It's also not clear that the iOS App Store would sustain up-front pricing at a level that would make up for the damage done to Windows. Windows licenses are estimated to net Microsoft about $35, Windows RT licenses around $85. If iOS Office were to price match the iWork apps ($30 for the set, of which Microsoft would receive $21) it'd still fall a long way short of the lost Windows revenue, let alone Windows RT. Every user defecting from Windows and Office to iPad and Office would represent lost revenue for Redmond.

Another option would be to remove the editing capabilities entirely, and leave the Office apps as free viewers. Doing this would not only preserve the advantages of Windows RT and Windows Phone, but might also take some of the wind out of the Office competitors' sails, as anyone wanting to view Office documents would probably pick Microsoft's apps in preference to third-party options.

Apple has no particular reason to back down and cut Microsoft a deal. It's not as if the iPad is suffering on the market; it certainly doesn't need Office. The best thing for Redmond is Cupertino sticking to its guns. But if it does relent, it'll free Microsoft to press ahead with its dangerously destructive plans. Microsoft may want to get its own way on the App Store. It should hope it doesn't.

<rant>What is up with this opinion piece?! Where are facts to back these statements up?! Arstechnica is mostly about publishing high quality tech news, not this kind of tabloid style what-ifs.

</rant>

Now, aside from that, Office's strength has always been about ubiquity, not an anchor for living on one OS. I'd argue that starting an essay in Word for Windows and then later edited on an iPad is exactly the benefit of having Office at all.

I cannot do the same with Pages (from Apple), though Apple has been improving Word support.

Maybe it's time for Microsoft to consider the option of broadening their horizons and becoming the best Office Suite and Gaming company in the world, and the idea of leaving Windows in the early 2000s. They make a great console, and Office is really good too, but I can't wrap my head around the benefits, if any, of Windows over Linux or Android. Even backwards compatibility is a two edged sword, since both the good software and the malware can take full advantage of it.

And please, Microsoft, release Office for Android too. That would fill the one hole that Android for Tablets really has in my personal opinion, as iWork for iOS is amazingly high quality, and all this sputtering about Android not having tablet apps is just nonsense. People really only use 10 to 20 apps on their tablets, even if they have 200 installed. Android has plenty of apps to do what people need from it, and the OS offers great flexibility. iOS is great for gaming though, and iWork will not disappoint either.

Microsoft is a software company, and as such, there's nothing wrong with regrouping for another assault from a different angle. I don't have anything against Microsoft, and I surely don't want them to go out of business, as that would just mean suffering for the families who work there. I just want them to be successful in a way that doesn't impose the headache that Windows is to people like myself.

Peter, I think you are forgetting one very critical thing, the Office division already makes far more money than Windows division does. Also, subscription revenue is FAR more preferable than one off Windows licenses. Bringing software-as-a-service to normal consumers is a huge leap in Microsoft's business model and far more profitable in the long run because you no longer have to deal with "well, will users upgrade?" because that isn't a question anymore.

As for whether Windows RT will die or not because of Office, how many people actually bought Windows RT because it had Office? Why does that matter when a Windows 8 tablet can have Office as well? I'm pretty sure a lot of people bought the Surface because of the versatility and battery life it gets, not the software it includes.

Microsoft is a software company. If they are offering Office for iOS then it is good for them. So when is the Linux version scheduled?

When Linux A) has users B) has users that would use Office instead of wrinkling their noses at the mere mention of the name like you just farted, while at the same time swearing they would use LibreOffice/AbiWord forever and ever rather than submit to paying M$ their blood money.

Microsoft is a software company. If they are offering Office for iOS then it is good for them. So when is the Linux version scheduled?

When Linux A) has users B) has users that would use Office instead of wrinkling their noses at the mere mention of the name like you just farted, while at the same time swearing they would use LibreOffice/AbiWord forever and ever rather than submit to paying M$ their blood money.

Linux already *does* have users, and frankly many of them would never even consider acting like option B. This isn't 2003, there is a significant populace of Linux users, and they aren't Richard Stallmans.

Really not interested in "software as a service," with recurring charges. I much prefer "owning" the program, as much as is possible, and not having to keep paying for the privilege of using it and accessing my data.

If MS offers Office for iOS/Android, it will be viewed in the future as a bold move that protected the ubiquity of their OS and application monopoly or as the brick that started the MS monopoly wall falling down.

Its really hard to tell what would happen. On the bright side, it does show MS is willing to experiment and try things that can cannibalize their old and potentially dying business model. On the down side, as the story stated, it can really destroy the main selling points of PCs and MS PC+ hardware.

I lean on the side of its a bad idea to do now. If this was done 2 yrs after Surface has been out, that's one thing. To do right when Windows Phone 8 and RT and Pro are just coming out? Potentially disastrous. I know office is one key selling point for me. I already own a iPad and an Android but I can't use them fully for work needs. Office 365 may not either...but its a heck of a lot closer than it is now.

I am a bit confused why subscriptions are the issue. The path forward is well known for iOS apps. Either give Apple their 30% cut or offer an app with no way to buy the subscription in app.

All that's left is for MS to do the calculation of which way will make them more money. Which is a business school 101 calculation once you get some data.

Now, I'd try to haggle Apple down if I was MS, but it's hardly a deal breaker. If it makes sense strategically, it makes sense - regardless if you give Apple a 30% cut, a 20% cut or no cut with lower turn over.

Microsoft is a software company. If they are offering Office for iOS then it is good for them. So when is the Linux version scheduled?

When Linux A) has users B) has users that would use Office instead of wrinkling their noses at the mere mention of the name like you just farted, while at the same time swearing they would use LibreOffice/AbiWord forever and ever rather than submit to paying M$ their blood money.

Linux already *does* have users, and frankly many of them would never even consider acting like option B. This isn't 2003, there is a significant populace of Linux users, and they aren't Richard Stallmans.

No, it does not. Have you seen any stats where Linux has more than 1%? Or do you think companies are stupid and ignoring a large market at their own peril?

And most of the uses are for servers and/or developer workstations, not for office users.

Where there are office Linux users, those are mostly in developing countries. And even there, most prefer just pirating Windows.

(And that's just the user base issue. The issue with binary compatibility across versions/distros and one coherent environment for a proprietary product to be released is even worse).

Peter, I think you are forgetting one very critical thing, the Office division already makes far more money than Windows division does.

That's a bit misleading. Windows and Windows Live has about one money-making product: Windows. Office division has Office, SharePoint, Lync, Exchange, and Dynamics. SharePoint, Exchange, and Dynamics are all substantial in their own right, each bringing in more than a billion dollars a year, but they're also largely independent of Office revenue. I think if you were to compare Office alone to Windows client alone then the numbers would be substantially in favour of Windows.

Quote:

Also, subscription revenue is FAR more preferable than one off Windows licenses. Bringing software-as-a-service to normal consumers is a huge leap in Microsoft's business model and far more profitable in the long run because you no longer have to deal with "well, will users upgrade?" because that isn't a question anymore.

This presumes that the Windows division doesn't have its own subscription plans. I think "Blue" could be the first step in that direction.

Quote:

As for whether Windows RT will die or not because of Office, how many people actually bought Windows RT because it had Office? Why does that matter when a Windows 8 tablet can have Office as well? I'm pretty sure a lot of people bought the Surface because of the versatility and battery life it gets, not the software it includes.

I disagree. Take away Office and you're better off with Clover Trail. Office is the only thing Windows RT has going for it.

first, this was a well-written article. and i think the logic is pretty sound...however it's hard to speculate on things like this with only a certain amount of information. i think the assumptions seemed reasonable, but i can't help but wonder if there's a larger story that Microsoft is creating that we are all missing in the short term. the 'devices and services' company that they are becoming keeps ringing in my ears when i read articles like this and i can't help but think that it's going to be a larger part of the reasons for the things that they do that we'll see over the next year or so.

i'm beginning to think that within a year they could be a company that is finding a niche no one else expected there to be. but as the article points out they could be hurting themselves with moves such as this that seem to be too focused on short term gains...of course they have stockholders to answer to, and as we've recently seen some of them are beginning to doubt some of the moves MS are making. they're on dangerous ground, for sure.

This article left me wondering about something not said. Is it possible that Apple has been slow at updating iWork as an incentive offered Microsoft to bring Office to iOS? That might explain why Microsoft got drawn into this decision.

Office is a cash cow for Microsoft; Surface is just their latest gamble. It's far more important for Microsoft that Office survive than Surface. And Office needs to be on the fastest growing platform of the new era.

I don't think that Microsoft is playing a dangerous game. When I saw that office for iOS was going to be a reality I was surprised and wondered at the logic behind such a move. Now, that I understand that it is going to be limited to document viewers with a subscription required for editing, it makes much more sense.

Any "damage" to Surface/Windows will depend on how good the iOS experience is in comparison.

What I think is rather strange is that Microsoft has, apparently, gone ahead and developed Office for iOS with the intent of using the in-app purchase mechanism to sell Office365 subscriptions without checking how much of a cut Apple would require. I find that very hard to believe.

I think Microsoft is finally seeing the light: Office is the real killer app here; and it's where they make most of their money. But it's not the only productivity tool out there; and it's not going to be enough to get people to buy a Surface on its own given the other limitations of the platform and the 2-4 year head start that Apple had.

So they had a choice: Wait for something else to replace Office, or release Office on iOS. Sure, it may hurt the value proposition of Surface, but let's be honest with ourselves: that value proposition was never very compelling to most consumers. If Microsoft wants Surface to win in the tablet market, it's going to need to do so on its own merits. Tying Office to it is just lazy, and it honestly threatens Office's position more than it helps Surface.

So overall, it's finally a good move from Microsoft after many boneheaded ones.

Peter, I think you are forgetting one very critical thing, the Office division already makes far more money than Windows division does.

That's a bit misleading. Windows and Windows Live has about one money-making product: Windows. Office division has Office, SharePoint, Lync, Exchange, and Dynamics. SharePoint, Exchange, and Dynamics are all substantial in their own right, each bringing in more than a billion dollars a year, but they're also largely independent of Office revenue. I think if you were to compare Office alone to Windows client alone then the numbers would be substantially in favour of Windows.

I think that's an impossible comparison to make given the way Microsoft sells its licenses to enterprises. To really big companies, they don't usually sell individual CALs, rather they just say "Well, most enterprises in your line of business use about $150 per employee, per year worth of our software. How about we just charge you that and we give you a site license?" Comes out to $30-50 million a year for a really big company, which is next to nothing when you're making tens of billions. It's not even worth haggling over because it would cost more to audit and track what you actually use than you would save.

I think Microsoft is finally seeing the light: Office is the real killer app here; and it's where they make most of their money. But it's not the only productivity tool out there; and it's not going to be enough to get people to buy a Surface on its own given the other limitations of the platform and the 2-4 year head start that Apple had.

So they had a choice: Wait for something else to replace Office, or release Office on iOS. Sure, it may hurt the value proposition of Surface, but let's be honest with ourselves: that value proposition was never very compelling to most consumers. If Microsoft wants Surface to win in the tablet market, it's going to need to do so on its own merits. Tying Office to it is just lazy, and it honestly threatens Office's position more than it helps Surface.

So overall, it's finally a good move from Microsoft after many boneheaded ones.

I agree. It would be a mistake for Microsoft to try to keep Office all to Surface. Offering Office in iOS and Android weakens Office's competition and put Surface on a crutch. That is never a good thing to do in terms of innovation or business. I think MS is taking a risky move but a valid one.

First off, to echo other comments, this was a very well written article. I've found myself coming here more often as you guys are writing about some excellent topics and doing it well.

"In spite of these risks, the rumors and leaks are hard to ignore. It seems that Microsoft really does want to produce an Office for iOS. If Apple has its way, however, there's a chance Microsoft might never ship it. Per AllThingsD, Apple has just rejected Microsoft's latest update to its SkyDrive app for iOS. "

I had just read an article about the SkyDrive app update denial and upon seeing this article that is exactly where my mind went. I see you immediately drew this line as well.

I have no skin in the game of whether Win RT succeeds or fails, but certainly adding a better experience to your competitor's platform seems like a mistake. I'm not sure what the numbers for Office 365 subscriptions look like, its been available for a little over a year now IIRC. I understand they may see this as a way to expand subscription numbers and improve revenue in the Office division, but again why throw millions of dollars in advertisements for your new moblie/tablet platforms only to give key functionality to a competitor who is beating you senseless in the mobile market?

As a longtime Windows user, sysadm by trade, and WP7 (now WP8) user I'd much rather see the time, energy, and fiscal resources spent in strengthening their own platforms and future offerings.

Office 365 > Surface in Microsoft's long-term plans. End of story. If they can sell more Office 365 licenses in lieu of selling more Surfaces, they will. Recurring revenue streams from resellable services has the holy grail for MS for man, many years. Right or wrong, they will chase that dream over an arguably one-shot platform.

It's no surprise. MS isn't taking tablets quite seriously enough to care. They won't commit to a dedicated mobile OS, they're making conservative moves vis-a-vis their hardware competitors, and they are moving everything to a cloud-based subscription model as quickly as possible.

Their hardware efforts are demos, reference implementations. The end game is to have MS software running on millions of mobile devices, whoever manufactures the hardware.

Office on mobile is less about shifting hardware units and more about dominating the era of BYOD and online services. They might have reason to believe they could sell two or three to one, apps to tablets, in which case the numbers make fine sense.

Office 365 > Surface in Microsoft's long-term plans. End of story. If they can sell more Office 365 licenses in lieu of selling more Surfaces, they will. Recurring revenue streams from resellable services has the holy grail for MS for man, many years. Right or wrong, they will chase that dream over an arguably one-shot platform.

Agreed that recurring revenue streams is the holy grail. But making that recurring stream dependent on a hostile competitor's platform is foolhardy. They can kneecap you at any time.

There's a large class of users that don't care about Office at all. There's also a number of users who care about Office so much that the version in Windows RT, or any potential version for iOS, will never be good enough. But there's also a bunch of users somewhere in between; people writing essays for their homework in Word, people balancing their checkbooks or running their home business in Excel, office workers making the finishing touches to a presentation in PowerPoint—for whom Office for iPad (or Office for Windows RT) might be more than enough—and who might well decide to forego a PC purchase entirely if their tablet can do the job.

Well the question is: if Microsoft doesn't offer a "lite" Office for iPad, how many of those users would stick to their Windows PC or consider a Windows "PC plus", and how many would instead just consider other iPad apps for their essays, checkbooks, and slides?Probably Microsoft think the latter group is way larger, at least for the level of editing capabilities they plan to offer.

Also, let's put it this way: "real" Office is THE big selling point for Windows tablets, but these tablets and Office itself aren't really ready for primetime yet. Eventually they will, probably... but until then, the more they can make the Office ecosystem relevant on other platforms, the better for the health of that selling point in the future.

Totally agree with author. It is not just office, it is direction. Making money on office by screwing company mobile effort would mean there is no strategy, every division on it's own. I bought Surface before Sinofsky left, hoping he has a plan and authority to execute. Even with mistakes he made, it felt like company coming together and can overcome lack of apps and immaturity of Win8. Yep, app store is crappy but it is getting better and there some things you can't get anywhere else to even it up. After all, MS is a software company, they can pull it, right? Sooner or later they catch up and having RT not such bad investment. That is, unless they busy making apps for competition... Frankly, it is appalling. I like Win8, but it needs so much polish. MS should be paranoid and throwing every developer on making it better. Look at email client - it is half-baked. There is no single "killer" app on RT that MS should have from start. It needs office to run on RT natively as Metro app for others to take WinRT seriously. But it seems like office division making good bonuses more important.If MS was a country at war, some executives would be facing firing squad for treason. And thing is, it is kind of at war.

If Microsoft put no effort into making office available for Android and iOS, that would be using their office monopoly to influence the tablet OS market. They know enough about that to know that it will get them into a lot of trouble.

As they already have Office on lightweight ARM, doing a half-hearted port to Android/iOS isn't that hard. If the Android one doesn't really work that well and Apple keeps the iOS one out of the store, all the better.

Office 365 > Surface in Microsoft's long-term plans. End of story. If they can sell more Office 365 licenses in lieu of selling more Surfaces, they will. Recurring revenue streams from resellable services has the holy grail for MS for man, many years. Right or wrong, they will chase that dream over an arguably one-shot platform.

Agreed that recurring revenue streams is the holy grail. But making that recurring stream dependent on a hostile competitor's platform is foolhardy. They can kneecap you at any time.

This is an especially pertinent comment, because back in 97, MS had the opportunity to do more than kneecap Apple (headshot is more like it) by withdrawing support for Office on Mac OS. They didn't, and instead affirmed that they'd support Mac OS for 5 more years, and that helped keep Apple afloat through the early years of The Second Coming of Steve Jobs.

Your financial analysis here makes no sense. iPads (and Android tablets) already exist and are purchased in huge and rapidly growing numbers. MS now gets _zero_ revenue from those. If it can sell Office and/or subscriptions to those users, then it both gains new revenue, and most importantly, helps maintain Office's status as a must-have (a status which is now slowly slipping away in certain markets).

You seem to want to assume that if Office isn't available for iPads (and Android tablets) that those users will instead purchase both Windows licenses and Office licenses. Reality has demolished your assumption. That's why MS is moving on. Should've released iPad Office more than a year ago, but better late than never.

This is a good move by MS, though I do agree that they ought to try to get some upfront revenue from it, not just push subscriptions.

Office 365 > Surface in Microsoft's long-term plans. End of story. If they can sell more Office 365 licenses in lieu of selling more Surfaces, they will. Recurring revenue streams from resellable services has the holy grail for MS for man, many years. Right or wrong, they will chase that dream over an arguably one-shot platform.

Agreed that recurring revenue streams is the holy grail. But making that recurring stream dependent on a hostile competitor's platform is foolhardy. They can kneecap you at any time.

This is an especially pertinent comment, because back in 97, MS had the opportunity to do more than kneecap Apple (headshot is more like it) by withdrawing support for Office on Mac OS. They didn't, and instead affirmed that they'd support Mac OS for 5 more years, and that helped keep Apple afloat through the early years of The Second Coming of Steve Jobs.

Don't forget that this isn't just an affirmation of iOS, this is also an affirmation of Microsoft in a cross-platform world. Android is also on the list of platforms that might get Office (and are getting other apps like SmartGlass). Also, Microsoft is deadly afraid of getting the DoJ hammer brought down on them as a monopoly. Back then, splitting the Windows and Office divisions was considered the "Worst Thing Ever" and was to be avoided at all costs. As such, demonstrating active support for other platforms might not be a pure business decision, it might be a regulatory one as well.